How will Mergers and Acquisitions Impact Ground Handling?

Oct. 20, 2022
Ground service providers continue to combine resources in order to enter new markets and strengthen their offerings.
Josh Smith, Editor - Ground Support Worldwide
Josh Smith, Editor - Ground Support Worldwide
Josh Smith, Editor - Ground Support Worldwide
Josh Smith, Editor - Ground Support Worldwide
Josh Smith, Editor - Ground Support Worldwide
Josh Smith, Editor - Ground Support Worldwide

In the last several months, a number of announcements have been made regarding acquisitions within the ground handling sector.

Most recently, SATS announced a proposed acquisition of Worldwide Flight Services (WFS). According to a release, the deal aims to better serve air cargo customers in SATS’ hubs in Asia, Europe and the United States while complementing new growth markets in Latin America and Africa, among others.

The proposed transaction, which is anticipated to be complete by March 2023 pending shareholder and regulatory approvals, would significantly expand SATS’ footprint as WFS operates in five of the top 10 cargo airports in North America and Europe, Middle East and Africa (EMEA) while SATS is present in four of the top 10 cargo airports in Asia, including Hong Kong, Taipei, Singapore and Beijing.

“This acquisition has been carefully selected to fit our strategy of significant scale and value-added growth,” Euleen Goh, chairman of SATS, said in a release. “We look to bring the newly added capabilities to strengthen our partnership with our customers and support the drive for competitive standing of Singapore’s Changi Airport Hub.”    

“By bringing together our respective strengths, we will be able to build on our trusted relationships around the world,” Craig Smyth, WFS CEO, said in a release.

Prior to the SATS/WFS announcement, Agility announced it acquired Menzies Aviation and intends to combine the business with National Aviation Services (NAS), establishing a combined presence in 58 countries.

When the companies merge, the combined company will operate under the Menzies Aviation name and provide air cargo, fuel and ground services.

“We will have the scale and resources to expand and grow as the industry recovers from the COVID-19 pandemic,” Hassan El-Houry, who will serve as chairman of the combined company after previously being the CEO at NAS, said in a release. Commercial aviation is a key engine of global economic growth, and our customers need partners they can count on as flight volumes return.”

Domestically in the United States, ground service providers are growing via acquisition as well. Alliance Ground International (AGI) announced it will acquire Airport Terminal Services (ATS) as part of its ongoing growth strategy across North America and into the passenger operations sector. The deal marked the third major acquisition made by AGI since October 2021, having previously announced the purchase of Total Airport Services TAS) and Maestro International Cargo.

“As AGI is a cargo handler working with cargo freighter operations, this opportunity with ATS will allow us to build our presence in the airport terminal and passenger side of the business,” AGI CEO Jared Azcuy said in a release.

Mergers and acquisitions are not new to the ground handling space. Ground service providers have combined resources to enter new markets and strengthen their offerings for many years.

But with each new deal that is struck, the industry’s landscape is altered. In the past, we have seen similar changes as airlines merged. Similarly, consolidation of ground support equipment manufacturers has made an impact.

How these recent examples of mergers and acquisitions influence the ground handling world are yet to be seen. Will these larger entities have more resources to better serve airline customers and attract new people to the labor pool? Will the recent acquisition prompt other companies to partner and consolidate in order to stay competitive?

I welcome your insight and feedback on this topic. Please email me at [email protected] to share your thoughts.